Does Nuclear Energy Need More Loan Guarantees?

Electricite de France SA and Constellation Energy Group say they want Exelon to join their UniStar Nuclear Energy development venture. After being ranked in the lower tier for federal loan guarantees, Exelon said it is seeking a reactor design more proven than the GE Hitachi Economic Simplified Boiling Water Reactor it initially planned to use in Texas. UniStar plans to use Areva SA’s Evolutionary Power Reactors in Maryland and New York.”

The Energy Policy Act of 2005 establishes loan guarantees for handful of reactors built in the United States. Now, some companies are making their case for unlimited loan guarantees and more subsidies to keep things moving forward.

But this is a clear example of why more loan guarantees aren’t needed. The important policy moving forward with regard to loan guarantees is that the program not be expanded in terms of dollar amount beyond what has already been legislated. Loan guarantees for the first few nuclear plants may be legitimate as a means to offset the risk posed by uncertain government regulation. However, any nuclear renaissance in America should not be dependent on these types of programs and will not grow to be sustainable if they do become dependent.